So Charles Schwab has recently announced that it wants to allow users to buy and sell “fractions” of stocks. This seems super weird to me because it’s like splitting the stock without the firm actually splitting the stock. I don’t know if this will have the effect of an alternate corporate and capital structure of the firm where shares are diluted (?) or if younger individuals will go something like:

Young Adult 2: Sorry man, I’m using my $2 to buy 1/300th of an Apple stock.

I understand when brokerage firms come in and say that they want to eliminate commissions - it increases access for individuals and creates an incentive to invest. But I don’t understand the incentive to buy or sell a fraction of what is already a fraction. I mean, how much will you split a share into? 100 units? 1000 units?

To this, add the layer of algorithmic trading, and then you would have computers trade against each other for a spread that is one-hundredth of a cent. Maybe this will lead to an entirely new line of business for asset managers who now begin to sell portfolios worth hundreds of dollars.

Saudi Aramco delays IPO

Oil giant Aramco has once again postponed the launch of its much-awaited IPO till December or January. I think the rationale here is to ensure that the firm can craft a prospectus that includes third-quarter revenues and profits to better sell the stock to potential investors. In the past month, we heard that the Saudi prince is somewhat unhappy with the $1.5 trillion valuation, and wants to go public at a $2 trillion instead. Perhaps time will buy them what investment bankers won't - more money.

China's slowdown

Some key figures regarding China’s economy came out late today, suggesting the country is facing fears in a global market that is wooing its first recession since 2008. Deflationary pressures have hit firms’ profits as the trade war has hurt Chinese exports. As the Chinese economy slows down, consumption decreases and the country imports less from the rest of the world, pushing up the trade surplus higher. Perhaps this is some twisted vision of Trump’s trade war panning out as it was perhaps meant to: the global economy has a headache, but China has a migraine.

**A share of a share**

Saudi Aramco delays IPO

China's slowdown

What we're talking about